Kimberly-Clark focused on its cash conversion cycle with the goal of reducing it by two to three days. The cross-functional, cross-regional project worked so well that the company actually cut the time by 15 days, says Jun Wang, assistant treasurer for global liquidity. That translated into a $900 million reduction in working capital for 2009 and contributed to an overall improvement in return on invested capital of 160 basis points. The $900 million was used to pay down debt, increase the pension contribution, and invest in business and acquisition opportunities.

To reinforce its working capital priority, Kimberly-Clark aligned performance reviews and compensation to reflect the achievement of project goals, according to Wang.

The three-pronged initiative involved inventory, receivables and payables. The inventory segment worked particularly well. The company cut the time it holds inventory by 10 days, partly by controlling and curtailing production with lean and run-to-quantity concepts. Stock-keeping unit rationalizations helped it gauge how much it could cut production and still have the stock it needs to fill customer orders, Wang explains. Kimberly-Clark trimmed lease and redistribution costs by vacating all 23 overflow warehouses and shedding the lease payments they entailed. Transportation costs were also reduced in the process.